Nonprofits depend on the generosity of donors to fund their missions. However, many nonprofits have seen a troubling trend in recent years of declining donor numbers even as total dollars raised have increased. This is due to an overreliance on large donations from a few, major donors. While courting wealthy donors is important, nonprofits must diversify their fundraising to build resilience.
According to Woodrow Rosenbaum, Chief Data Officer at GivingTuesday, nonprofits with a broad base of support from many small, grassroots donors weather economic uncertainty and downturns much better than those dependent on a handful of large gifts. Large donors tend to reduce or pull back donations more in tough times. With the possibility of a recession looming, nonprofits must take action now to expand their donor base and not put “all their eggs in one basket.”
Nonprofits often misunderstand donors and their motivations.
They incorrectly assume that people give primarily with their wallets and mainly support registered nonprofits. In reality, people give in many ways – their time, skills, and directly to those in need. And much of people’s giving does not involve nonprofits at all. People remain very motivated to give to make a difference, especially in times of crisis. Tapping into people’s desire for purpose and agency can open up new fundraising opportunities.
To boost donor diversity, nonprofits need to overhaul their fundraising strategies and mindsets. They must engage grassroots supporters year-round, not just during the end-of-year giving season. Using multiple communication channels with a compelling message of unity and agency, nonprofits can inspire more people to give and raise more money. Partnerships with other organizations can also help cast a wider net to reach and engage more potential donors.
The time for nonprofits to act is now to build donor resilience and ensure financial stability regardless of what the future may hold. With some openness to new approaches, nonprofits can turn the troubling tide of donor decline and thrive. Overall, spreading fundraising across many baskets of donors is key to nonprofit health and impact.
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